ASCON ARABIAN ALUMINIUM, MUMBAI v. ITO (3)(1), MUMBAI

ITA 54/MUM/2009 | 2003-2004
Pronouncement Date: 23-03-2011 | Result: Dismissed

Appeal Details

RSA Number 5419914 RSA 2009
Assessee PAN AAACA5687N
Bench Mumbai
Appeal Number ITA 54/MUM/2009
Duration Of Justice 2 year(s) 2 month(s) 18 day(s)
Appellant ASCON ARABIAN ALUMINIUM, MUMBAI
Respondent ITO (3)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-03-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 23-03-2011
Date Of Final Hearing 15-09-2011
Next Hearing Date 15-09-2011
Assessment Year 2003-2004
Appeal Filed On 05-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: MUMBAI BEFORE SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO.54/MUM/2009 (ASSESSMENT YEAR: 2003-04) M/S. ASCON ARABIAN ALUMINIUM CO. PVT. LTD. 75-B MITTAL COURT NARIMAN POINT MUMBAI -400 021 ASSESSEE VS INCOME-TAX OFFICER 3(1) MUMBAI-400 021 REV ENUE PAN: AAACA 5687 N ASSESSEE BY: SHRI PRAMOD KUMAR PARIDA REVENUE BY: SHRI D. SONGATE O R D E R PER R.S. PADVEKAR JM THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING TH E IMPUGNED ORDER OF THE LD. CIT (A) 27 MUMBAI DATED 26.09.2008 FOR THE A.Y. 2003-04. THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE GROU NDS:- 1. DISALLOWANCE OF CLAIM OF DEPRECIATION ` 4 03 548/- THE LD. CIT (A) ERRED IN CONFIRMING THE DISALLOWANC E OF DEPRECIATION WITHOUT APPRECIATING TO THE FACT THAT IT WAS DUE TO UNAVOIDABLE CIRCUMSTANCES BEYOND ITS CONTROL THE F ACTORY COULD NOT FUNCTION. AS THE PLANTS AND MACHINERIES WERE READY FOR USE AND THE SAME HAD BEEN USED EARLIER YEARS ON WHICH DEPRECIATION WAS ALLOWED NOW ON A TEMPORARY LULL THE ITA 54/M/2009 M/S. ASCON ARABIAN ALUMINIUM CO. PVT. LTD. 2 DISALLOWANCE OF DEPRECIATION IS UNCALLED FOR AND TH E SAME MAY BE ALLOWED. 2. CARRY FORWARD AND SET-OFF OF LOSS THE LD. ASSESSING OFFICER ERRED IN NOT ALLOWING THE CARRY FORWARD AND SET OFF OF BUSINESS LOSS TO THE NEXT PE RIOD FOR ADJUSTMENT AGAINST FUTURE PROFITS. 3. LEVY OF PENAL INTEREST THE APPELLANT ON MERITS DENIES ITS LIABILITY TO P ENAL INTEREST. 2. WE HAVE HEARD THE PARTIES. THE ASSESSEE-COMPANY WAS IN THE MANUFACTURING OF ALUMINIUM WINDOWS CURTAIN WALLING CLADDING ETC. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y . 2003-04 DECLARING INCOME OF AT ` NIL AND ASSESSEE SHOWN A LOSS OF ` 12 60 779/- WHICH INCLUDED BUSINESS LOSS OF ` 8 57 231/- AND DEPRECIATION OF ` 4 03 548/- AND SAME WAS CLAIMED TO BE CARRIED FORWARD TO THE S UBSEQUENT YEARS. INITIALLY THE RETURN OF INCOME WAS ACCEPTED U/S.14 3(1) BUT SUBSEQUENTLY THE A.O. ISSUED NOTICE U/S.148 FOR THE REASON THAT AS THE ASSESSEE HAS NOT CARRIED OUT ANY BUSINESS ACTIVITY AND HENCE DEP RECIATION TO THE EXTENT OF ` 4 05 548/- CLAIMED BY THE ASSESSEE IS TO BE DISALL OWED. THE ASSESSEE EXPLAINED THAT THE CENTRAL EXCISE HAS SEIZ ED THE UNIT WHERE THE ASSETS WERE LOCATED. THE BUSINESS ACTIVITIES HAD B EEN CONDUCTED FROM THE SAME PREMISES AND IN THE PRECEDING YEARS AND AL L THE ASSETS BELONGING TO THE ASSESSEE. THE ASSESSEE ALSO CONTE NDED THAT FOR CLAIMING THE DEPRECIATION IT WAS NOT NECESSARY THAT ASSETS S HOULD BE USED CONTINUOUSLY FOR MANY YEARS. THE ASSESSEE THEREFO RE CLAIMED THAT THE DEPRECIATION IS TO BE ALLOWED. THE A.O. WAS NOT IM PRESSED WITH THE DIFFERENT DECISIONS RELIED ON BY THE ASSESSEE. BUT A.O. HELD THAT IN VIEW OF THE SECOND PROVISO INSERTED TO SECTION 32(1) W.E .F. 1.4.1992 THE ASSESSEE CANNOT BE ALLOWED THE DEPRECIATION. THE A .O. THEREFORE DISALLOWED THE DEPRECIATION IN CONSEQUENCE THE LOSS WAS REDUCED. THE ITA 54/M/2009 M/S. ASCON ARABIAN ALUMINIUM CO. PVT. LTD. 3 ASSESSEE CHALLENGED THE SAME BEFORE THE LD. CIT (A) BUT WITHOUT ANY SUCCESS. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LD. COUNSEL ARGUED THAT THE ASSESSEE HAS NOT CLOSED THE BUSINESS NOR HAD ANY INTENTION TO WIND UP THE BUSIN ESS. IT IS MERELY A CASE OF TEMPORARY LULL IN THE BUSINESS OF THE ASSES SEE. THE BENCH PUT A QUERY TO THE LD. COUNSEL FOR HOW MANY YEARS SINCE I T IS CLOSED? HE FAIRLY CONCEDED THAT TILL TO DAY THE BUSINESS COULD NOT BE REVIVED OR RESTARTED. HE ALSO FAIRLY CONCEDED THAT THE FACTS AS STATED B Y BOTH THE AUTHORITIES BELOW ARE NOT IN DISPUTE. ADMITTEDLY THE CASE OF THE ASSESSEE CANNOT BE CLASSIFIED AS A TEMPORARY CLOSING OF THE BUSINESS AS FOR LAST MORE THAN 10 YEARS THE ASSESSEE HAS NOT CARRIED OUT ANY BUSIN ESS ACTIVITY. EVEN THE SUBSEQUENT CONDUCT OF THE ASSESSEE SHOWS THAT T HE ASSESSEE IS NOT INTERESTED TO CARRY ON THE BUSINESS. NOTHING HAS B EEN PLACED BEFORE US TO SUPPORT THE PLEA OF THE ASSESSEE THAT THE ASSESS EE HAS INTENTION TO RESTART THE BUSINESS. AFTER GIVING OUR CONSCIOUS C ONSIDERATION WE ARE OF THE OPINION THAT NO INTERFERENCE IS CALLED FOR. WE THEREFORE CONFIRM THE ORDER OF THE LD. CIT (A) AND GROUND NO.1 IS DISMISS ED. 4. THE LD. COUNSEL SUBMITTED THAT GROUND NO.2 & 3 A RE CONSEQUENTIAL. AS GROUND NO.1 IS DISMISSED HENCE G ROUND 2 & 3 WHICH ARE CONSEQUENTIAL TO GROUND NO.1 ARE ALSO DISMISSED . 5. IN THE RESULT ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY O F 23RD MARCH 2011. SD/- SD/- ( J. SUDHAKAR REDDY ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI DATE: 23RD MARCH 2011 ITA 54/M/2009 M/S. ASCON ARABIAN ALUMINIUM CO. PVT. LTD. 4 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) XXVII MUMBAI. 4) THE CIT CITY-3 MUMBAI. 5) THE D.R. A BENCH MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR *CHAVAN I.T.A.T. MUMBAI ITA 54/M/2009 M/S. ASCON ARABIAN ALUMINIUM CO. PVT. LTD. 5 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 15.03.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 15.03.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER